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Barita launches two unit trust products

Published:Sunday | May 25, 2014 | 12:00 AM

Barita Unit Trust Limited has launched two new unit trust products - Barita Income Portfolio and the Barita Foreign Exchange Bond Portfolio.

The income portfolio product is a unitised portfolio invested in instruments such as government and corporate paper, Bank of Jamaica instruments preference shares, and promissory notes. Like repos, the product allows clients to have regular or ad hoc interest payments.

The FX bond product is invested in interest bearing instruments priced in foreign currency, such as local government securities, sovereign foreign currency instruments and A-grade local institutions and corporate enterprises.

Jamaica's investment sector have been realigning their balance sheets away from risky repos towards off-balance sheet products. The refocus on collective investment schemes has seen a rise in unit trust activity - for example, NCB Capital Markets Limited entered the market last year with three products.

Collective schemes "came as a result of the IMF's concern for the safety of client's investments, which required that more protection be given to clients' money," says Barita chairman Rita Humphries-Lewin.

The main feature of the CIS is that the members of the scheme are the sole owners of all the assets in the scheme.

"Neither the trustee nor the managers can use these assets nor add these assets to their balance sheet," Humphries-Lewin said.

The FX bond portfolio positions Barita for business from among investors seeking safe harbours against the depreciation that takes place, according to business development manager Neilson Rose.

As of May 19, 2014 the current yield of the income portfolio was 7.56 per cent, while the yield of the foreign currency bond portfolio was 6.02 per cent.

"With inflation running in single figures, you can actually see real returns," Rose said.

Barita now has four unit trust products in its portfolio. The market comprises five fund managers selling units in 23 products.